What are the big things you are going to need to buy in the next few years? A car? A house? Financial goals are not as hard to establish as you may think, and they are the only realistic way to work toward the things you really need in life.

1. Identify Reasonable Goals

Financial stability means different things to different people. Figure out what you want to do with your money that would make you feel the most comfortable in the long run. Make a list of the goals you want to accomplish in the next ten years, and then make a list of the average expenses of each goal.

2. Prioritize

Once you have your list of goals put together, look at each item and rank it in order of importance. For example, sending your son to college would probably rank higher than taking a cruise to Alaska. Rearrange the list so that the things you want the most are at the top.

3. Make the Tough Choices

Not all of your big financial goals are going to fit nicely together. You may have to sacrifice one in order to keep another. Remember that every dollar you spend on one item is a dollar you won’t have available to spend on something that might be more important to you in the long run.

4. Plan Ahead

Give yourself plenty of time to achieve your financial goals. Take advantage of savings accounts and investments that will help your money grow over time so that you will have more when you need it later.

5. Practical Considerations

Remember to include goals that will help keep you and your family financially secure. Think about creating an emergency fund for unexpected expenses. Begin to build tuition funds for young children. Create retirement savings that will take care of you in your older days.

6. Include everyone who is Directly Affected

If you are married, make sure that you discuss your financial goals with your spouse. Talk with your children about the financial goals that include them.

7. Begin Right Away

Getting your finances in order is like going on a diet. It’s really easy to say you’ll start next week or next month and then never get around to it. Once you choose to create a solid financial plan, put it in order and start using it as soon as possible.

8. Maintain Discipline

Daily spending is the hardest to control. Every time you think about making a big purchase, remember what your goals are. If the goals are really important to you, they will be enough to keep you from blowing your cash on something you don’t really need.

9. Give Yourself some Breathing Room

Budget in some walking around money so that you never feel too limited. It’s important to have a little flexibility to purchase less expensive items when you want them.

10. Make Changes as Time Passes

As you and your family get older, your financial situation and goals will change. Revisit your plan every three to five years and make changes so that it fits reality.

While the economy seems to be showing a marked improvement from where it was at its lowest point, there is no guarantee that it will continue to improve and remain good for any length of time. Indeed, market indicators have been shaky at best. It would be wise to take this time of introspection to learn from mistakes made during the recent financial turbulence.

When the economy was earning a gold medal with a 10.0 inward somersault in the pike position, people fell into two distinct categories: those who struggled and those who thrived. The people who struggled tried to keep up with their lavish lifestyles when money was tight, but those families that thrived during the downturn already had good frugal habits in place. Following is a list of some of the most common financial pitfalls.

Food: Poor Planning and Eating Out

There are many good reasons to dine out in a restaurant: celebrations and first dates are a couple of them. Some bad reasons people use to excuse their dining out is that they are too busy or they do not feel like cooking, or they cannot make meals taste as good as their favorite restaurant can. These excuses boil down into the fact that this basic skill has been delegated to someone outside of the family. A decision should be made about whether they are willing to sacrifice a bit of flavor for more financial security. Making a weekly menu and buying a good cookbook will go a long way toward saving a ton of dough for the family’s future.

Mortgages: Too Much House

During the heyday of home buying several years ago, many people bought a much larger house than they could realistically afford. The housing market tragedy has become infamous for the role it played in people losing their homes recently, but that scenario can be avoided this time around if families choose a smaller home than they can afford; that means the total cost of the mortgage should not be more than one quarter of the family’s take home pay. There is no sense keeping up with the Joneses if their house is getting repossessed anyway.

Toys: Cool Toys are Costly

There are many must-have items on the market today, from phones to eReaders to video game systems to vehicle accessories. These items are called status symbols for a reason: people of status (ie: them that got) can afford them. There is no sense in having huge alloy wheels with spinners on a vehicle if you can’t afford the tags or insurance for it. Why buy those cute designer pumps and matching bag only to stand in the unemployment line?

Goals and a Budget: The Ultimate Status Symbol

The family that was able to keep their financial heads above water when times got rough did so because they wrote down their goals and created a budget. The budget allowed them to reach their goals. No, they knew that there would be little glamour and convenience, but they felt no pinch when such things were suddenly hard to come by. Only now do many of us realize that peace of mind is more precious than any dinner out or fancy toy.